2016 (9) TMI 1120 - AT - Customs

Revocation of CHA license - forfeiture of security deposit - Regulation 20(1) of Customs House Agents Licensing Regulations 2004 - declaration of consignment as photocopying machines - on examination Red Sanders Wood found - whether Adjudicating authority is justified in revoking the CHA license of the appellant under Regulation 20 (1) for not discharging the obligations under Regulation- 13 (a), (d) & (o) of CHALR? - Held that - CHA is required to verity the antecedents of his clients & suitably advice them. At no stage, appellant had the knowledge that there is any irregularity in the export/ import consignments. The goods imported were put to first check examination and the importer very well exists. Similarly the export consignment was received in a sealed container duly examined & certified by the jurisdictional Central Excise authorities. The exporter is also existing. Bills of entry & shipping bill were filed by the appellants based on the documents furnished by the importer / exporter. If there was any irregularity in the documents then the same was also available before the assessing officers and the Customs examining officer. If the same could not be detected by the appellant the same also could not be detected by departmental assessing/ examining officers. There is no evidence on record that appellant came to know of any irregularity before the same were detected by the department or that he did not advise the concerned clients - It is also observed that the points of difference from the Inquiry report are not so glaring to justify revocation of CHA license as held by the Adjudicating authority. The whole spirit of obligation of the CHA under the CHALR is to establish the indentity of the importer/exporter & appropriately advise his clients, is existing - reasonable steps were taken by the appellant to comply with Regulation -13 (a), (d) & (o) of CHALR. Revocation of license and forfeiture of security deposit not justified - appeal allowed - decided in favor of appellant.

Summary

Issues:
Revocation of CHA license under Regulation 20(1) of CHALR and forfeiture of security deposit.

Analysis:
The appellant filed an appeal against the order revoking the CHA license and forfeiting the security deposit. The appellant was approached by various parties for customs clearance of goods, and in two instances, irregularities were found by the authorities. In one case, the containers were seized, and Red Sanders Wood was found instead of declared items. In another case, a penalty was imposed for a similar discrepancy. The appellant's license was suspended and then revoked, leading to multiple legal proceedings. The Adjudicating authority disagreed with the findings of the inquiry officer and revoked the license again. The appellant argued that all necessary verifications were done, and they were not aware of the irregularities. The Revenue argued that the appellant did not take sufficient steps as pointed out. The main issue was whether the Adjudicating authority was justified in revoking the license under Regulation 20(1) for not fulfilling obligations under Regulation 13(a), 13(d), and 13(o) of CHALR.

The Regulations require a Customs House Agent (CHA) to verify client antecedents and advise them accordingly. The appellant had no knowledge of irregularities in the import/export consignments, and the goods were examined by authorities at various stages. The appellant filed documents based on information provided by clients, and any irregularities should have been detected by assessing officers. There was no evidence that the appellant was aware of irregularities before they were detected by authorities. The inquiry officer exonerated the appellant, and the differences in the inquiry report were not significant enough to justify license revocation. The essence of CHA obligations is to identify clients and provide appropriate advice, which the appellant had done. Therefore, the appeal was allowed, and the order revoking the license was set aside.

In conclusion, the judgment focused on the obligations of a Customs House Agent under CHALR and whether the Adjudicating authority was justified in revoking the CHA license. The analysis highlighted the verification processes followed by the appellant, the lack of evidence of their knowledge of irregularities, and the reasonable steps taken to comply with regulations. Ultimately, the appeal was successful, and the license revocation was overturned.